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May 30, 2017

How to Avoid Common Scams That Target Older Adults

Gary S. Brown

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In New York alone, seniors lose as much as $1.5 billion each year to financial exploitation. The national figure is undoubtedly much higher. Unfortunately, there are many ways for con artists and other criminals to gain entry into the lives of older adults: over the phone, through the internet, sometimes in their own homes.

This article focuses on common scams and frauds that target older adults, with emphasis on the warning signs and how to avoid becoming a victim. From telephone safety techniques to internet dos and don’ts, from recognizing scams to knowing how to avoid them, it’s important for older adults to know the best ways to protect themselves.

The essence of a good scam is to trigger an emotional response in the victim, which leaves the victim not thinking clearly and more easily manipulated. Greed, fear, love, good will – all of these emotions are used by scammers. Even sophisticated, experienced and hardened consumers can be vulnerable if the scammer pushes the right emotional buttons. Some common scams to look out for include:

Lottery scams

An older adult gets a phone call, email or letter congratulating them on winning a lottery or sweepstakes, often from a foreign country. All the older adult needs to do to claim a large cash prize or giveaway is to pay the taxes up front. The "winners" are instructed to purchase pre-paid debit cards or gift cards, and then to call back and read aloud the serial numbers on the cards (which allows the funds to be transferred). However, the "winnings" never arrive and the scammers continue to contact the older adult asking for more money with the promise of an imminent windfall.

Protect Yourself:

Legitimate contests will never request money up front.

You cannot win a contest that you did not enter.

Telemarketers cannot legally ask you to pay by wire transfer, or by providing the serial number on a pre-paid debit card or gift card.

Foreign lotteries are illegal in the United States, so notification that you have won another country’s lottery is fraudulent by definition.

"Grandparent" scam

An older adult receives a phone call from someone claiming to be their grandchild. The "grandchild" claims to be stranded in a foreign country, in trouble, and needs the grandparent to send money immediately. They usually ask the grandparent not to tell other relatives so they won’t get in trouble. Later, the older adult finds out that the caller was an imposter.

Protect Yourself:

Do not send money without verifying the identity of the caller. Ask the caller questions that only the real grandchild would know the answer to, such as the name of the grandchild’s first pet.

Always check with another family member or friend to verify the caller’s story – even if the caller asks you to keep it a secret.

For more information about this scam, download a brochure created by the New York Attorney General’s Office here.

IRS Scam

A scammer impersonating an IRS agent calls an older adult. The victim is told they owe a large amount in back taxes and will be arrested if the money isn’t paid the same day. The scammer continues to hound and threaten the older adult until the victim agrees to pay, often by purchasing pre-paid debit cards or gift cards and calling back to read the serial numbers aloud.

Protect Yourself:

The IRS will never ask you to pay a debt by wiring money or by loading money onto a pre-paid debit card or gift card and calling back with the serial numbers. Anyone who asks you to do this is an imposter.

If you receive a suspicious call from someone claiming to be an IRS agent, hang up the phone. You can call the IRS to find out if they were actually trying to reach you.

Don’t trust your caller ID. Even though it may say a call is from "Washington, DC" or "IRS," scammers use Caller ID "spoofing" and can be calling from anywhere in the world.

For more information from the New York Attorney General’s office on the IRS Scam, download a brochure here.

Charity fraud

Someone contacts an older adult seeking a donation for a charity, often with a nice demeanor and a sad story. Either the majority of the money goes to the fundraising company and not the charity, or the charity is entirely fake and the scammers take the money.

Protect Yourself:

Investigate before you donate. Learn about the charity’s goals and programs and how they will use your donation. Check to see whether a charity is registered to fundraise in your state.

Pressure to donate immediately is a red flag. Ask the caller to send you some literature so that you can better research the charity.

Never give your Social Security number or other personally identifying information to someone asking for a charitable donation. Do not give credit card information to an organization you do not know well.

Home improvement scams

An individual claiming to be a contractor will coerce an older adult into making a large advance payment for home repairs. Often this scammer will knock on an older adult’s door unsolicited and claim to have driven by and seen something that urgently needs to be fixed. The work is either shoddily done or never completed.

Protect Yourself:

Research, check references and get at least two estimates whenever you plan to have repairs done on your home.

Be suspicious of anyone who makes an unsolicited offer to do home repairs.

Never pay the full amount before the job is finished and always pay by credit card or check, never cash.

Investment scams

A slick salesperson or "too good to be true" offer persuades an older adult to invest in a product or business that is either entirely fake or highly inappropriate for the investor’s financial needs and goals. These scammers will also often charge victims steep commissions.

Protect Yourself:

Question the credentials of people who represent themselves as investment professionals. Scammers may call themselves "senior specialists" to gain older adults’ trust.

Never feel pressure to invest immediately. A reputable investment advisor will never try to rush you into making a decision. Take the time to research an investment before handing over any money.

People who sell financial products, as well as financial products themselves, must be registered with state officials.

For more information from the New York Attorney General’s office on investment scams, download a brochure here.

Internet scams

The internet is a wonderful place for older adults, but also has many scammers lurking. In a "phishing" scam, an authentic looking email directs you to a website resembling a bank’s site or even the Social Security website, and prompts you to enter credit card or other personally identifying information to "verify your identity" or "address a problem with your account." That information is then used to steal the victim’s identity and money.

Protect Yourself:

Shop and bank online only when using a secure website, showing https:// in your web browser.

Never give out personally identifying information in response to an unsolicited email.

Do not click on links in emails from someone you do not recognize, regardless of who they claim to be.

If you receive an email claiming there is a problem with one of your accounts, do not reply directly. Instead, call the company using the phone number on your bank or credit card statement, or log directly onto the company’s website.

Scam telephone calls

Older adults are experiencing an epidemic of scam telephone calls such as the IRS Scam and the Grandparent Scam mentioned above.

Protect Yourself:

Think of the phone as a "one way" street. Only give out personal information if you placed the call.

Use Caller ID as a screening tool. Only answer the call if you recognize the number. Otherwise let the call ring through to voice mail.

If you think you’re being victimized by a scam, immediately contact your local police, state attorney general’s office, or the Federal Trade Commission. For more detailed information on how older adults can protect themselves financially, visit the New York Attorney General’s website at www.ag.ny.gov.

Gary S. Brown

Gary S. Brown is the statewide Elder Abuse Coordinator for New York Attorney General Eric T. Schneiderman. He is also the Assistant Attorney General-in-Charge of the AG’s Westchester Regional Office. Mr. Brown is the Chair of the Westchester Elder Abuse Coalition and is a member of the Elder Financial Exploitation Advisory Board of the National Adult Protective Services Association.